Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has come closer to a private placement of 579.7 million shares to foreign investors in a move to raise charter capital to VND39.57 trillion (US$1.69 billion).

Vietcombank’s profit by the end of September is estimated to exceed VND11 trillion. — Photo VCB

According to the largest Vietnamese lender by market value, the State Securities Commission (SSC) on Wednesday affirmed that it received Vietcombank’s application and other relevant documents for the private placement.

Under Vietcombank’s issue plan, the bank is expected to offer 53.9 million shares, or 1.36 per cent of the bank’s total shares after the offering, to its largest current foreign investor Mizuho Bank so that the Japanese bank will maintain its holding in Vietcombank at 15 per cent.

The 305.8 million remaining shares, or 7.73 per cent of the bank’s total shares after the offering, will be offered to other foreign investors.

After completing the sale, the shares will not be transferable for one year.

Vietcombank hasn’t so far released details about the private placement. However, according to the bank’s resolution of the annual general meeting of shareholders early this year, the offering price will not be lower than the price determined by an organisation providing corporate valuation services and the market price averaged in the 10 consecutive sessions before the date investors announce to buy the shares.

Additionally, the lender will favour foreign investors with strong financial status, possibly including one or several existing shareholders of Vietcombank.

With the sale, Vietcombank expects to increase its charter capital by VND3.6 trillion to VND39.57 trillion in a move to meet a capital adequacy ratio (CAR) of at least 8 per cent as per the State Bank of Viet Nam’s Basel II norms, starting in 2020.

Vietcombank’s profit by the end of September is estimated to exceed the VND11 trillion that the bank gained in the entire 2017. The figure is up some 50 per cent against the same period last year.

With the rise, the bank is expected to soon surpass the VND13 trillion profit target set for 2018 at the bank’s annual general meeting of shareholders.

Vietcombank shares (VCB) closed Friday’s morning session at VND57,800 apiece, down 0.3 per cent against Thursday. 

VPBank fixes foreign holding to prepare for private placement

Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has announced a temporary foreign ownership limit at 22.532 per cent of charter capital to prepare for a private placement.

After completing the private placement, the bank will work with the Vietnam Securities Depository Centre to raise the ratio to a 30 per cent cap.

VPBank hasn’t yet released details about the private placement.

The foreign holding ratio at VPBank has fallen from 22.784 per cent to 22.532 per cent after the bank issued shares for its staff under the Employee Stock Ownership Plan (ESOP) last month. At the ESOP, the bank’s foreign employees received more than 1.3 million shares.

During the annual general meeting of shareholders (AGM) in March, VPBank chairman Ngo Chi Dung announced the bank was looking to raise capital through a private placement in the upcoming months, then lift its foreign ownership limit to 30 per cent and invite potential foreign investors to pay a premium for its stakes.

The total shares on offer for both local and foreign investors would be a maximum of 15 per cent of the common stocks on record at the time of the private placement, Dung said. VPBank’s common stocks currently are nearly 2.53 billion shares, so the total shares to be offered at the private placement will be some 379 million.

Dung noted at the AGM that the possibility for the stocks to find foreign investors was high.

According to Dung, upon the successful completion of the private placement, not only will the bank’s capital adequacy ratio be boosted to 18 per cent, but also a considerable reserve will be set aside for mergers and acquisitions, which the bank could not do in the past five years due to a lack of capital. 

VNS